Answered: How much will you need to save per…

How much will you need to save per month to have $200,000 after 12 years, if you account earns 5% interest per year, compounded monthly?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 14EB: How much must be invested now to receive $50,000 for 8 years if the first $50,000 is received in one...

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Question

How much will you need to save per month to have $200,000 after 12 years, if you account earns 5% interest per year, compounded monthly?

Expert Solution

Step 1

Compound interest = P"(1+r%/n)^tn

Since the final amount is given , we need to calculate the principal amount

Interest rate =5%

Years = 12

Step by step

Solved in 2 steps

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